3rd DCA Finds Trial Court Erred In Holding That a Notice to Creditors was a Nullity for Having Been Published on Day Before Entry of Order Appointing Personal Representatives

In Richard v. Richard, 2016 Fla. App. LEXIS 6747 (Fla. 3d DCA, 2016), Edward Richard (“Decedent”) passed away in 2012. Subsequently, his surviving spouse, Karen, and his son, Joel, filed a petition for testate administration, seeking to be appointed co-personal representatives of the estate. Their petition was granted, the applicable will and codicil were admitted to probate, and the letters of administration were signed. However, one day prior to the court’s order appointing them as co-personal representatives, but nearly a month after they had signed the oath of personal representatives, Karen and Joel signed as personal representatives and published the first notice to creditors. Over three months after the first notice to creditors was published, Karen filed a statement of claim, asserting that pursuant to a prenuptial agreement between herself and Decedent, she was entitled to nearly $4 million in retirement benefits. She also filed a petition for declaration that her claim was timely, or in the alternative, to extend the time to file her claim based on estoppel or insufficient notice. She claimed that the estate became aware that she may have had a potential claim against the estate and therefore, became obligated to serve her with notice, but failed to do so.

One of Decedent’s children, Kim, along with Joel (collectively “Appellants”) objected to Karen’s claim and noted that it was barred because it was not timely filed. They further asserted that Karen was not a reasonably ascertainable creditor and, alternatively, that Karen was estopped from claiming a lack of written notice because she was one of the co-personal representatives and was a signatory to the notice to creditors. Appellants also alleged that the claim was not served in compliance with Florida Probate Rules and that Karen failed to establish she was entitled to an extension of time based on fraud, estoppel or insufficient notice.

In response, Karen (“Appellee”) noted that she was a reasonably ascertainable creditor; that Joel and counsel knew about her claim but failed to serve her with the notice to creditors, that the Estate would not be prejudiced by her claim, and that “equity and fairness” weigh in favor of her claim, as former spouse of the Decedent. Finally, Karen argued that the notice to creditors was null and void because it was not published by a duly appointed personal representative as required by Florida law, due to the fact that she and Joel were not appointed until the day after the notice was published. She argued that the relation back doctrine did not apply because the statute in question, Section 733.601, Fla. Stat., expressly provides only that a personal representative’s “powers” relate back, but not a personal representative’s “duties.” Since publication of notice to creditors is a duty and not a power, order appointing personal representatives did not relate back to the premature notice to creditors signed and published the day before.

Appellee filed a motion for summary judgment on the issues of whether the notice to creditors was null and void, whether her statement of claim was barred, whether the relation back doctrine applied, and whether she was a reasonably ascertainable creditor such that she should have been served with a notice to creditors. At a hearing on the motion, the trial court granted summary judgment, concluding that the notice to creditors was a nullity because it was published one day prior to the court’s order appointing the co-personal representatives and that the relation back doctrine did not apply to validate the act of publication. The court held a subsequent hearing in which the court denied Appellants’ motions to strike Appellee’s claim and amended motion to declare her claim timely filed and granted Appellee’s motion, determining that neither the first nor the second notice to creditors was valid, and declared Appellee’s claim timely filed. Appellants sought review from the Third DCA.

The Third DCA disagreed with the probate court regarding the application of the relation back doctrine because Section 733.601, Fla. Stat. provides that, “The duties and powers of a personal representative commence upon appointment.  The powers of a personal representative relate back in time to give acts by the person appointed, occurring before the appointment and beneficial to the estate, the same effect as those occurring after appointment.  A personal representative may ratify and accept acts on behalf of the estate by others when the acts would have been proper for a personal representative.” The Court noted that the “powers” refer to acts of the person who is later appointed as personal representative of the estate which are ratified by the statute, not duties. It would be problematic to read the statute to mean “duties and powers” because doing so would improperly place upon personal representatives a duty to act on behalf of an estate without having even been appointed as personal representative(s). The court found that the publication of a notice to creditors can be viewed as both a duty and a power of the personal representative, not just a duty, as Appellee contended. Thus, it held that the relation back doctrine applied to the co-personal representative’s act of publishing the early notice to creditors, rendering the notice valid.

If you or anyone you know is in need of representation in actions involving Guardianship, Probate and/or Trust Disputes, or questions pertaining to such proceedings, please contact The Law Offices of Glenn M. Mednick, P.L., at (954) 315-1154 or gmednick@mednicklawgroup.com.